Question

Francine is interested in starting a new financial services company where she will manage the investments of others. She wants to generate her own funding as well as lead the business once it gets started. Francine will assume all risks and rewards of the new enterprise. Francine would be considered an entrepreneur because she is:

a.) someone who can expertly manage other people's investments.
b.) someone who initiates and assumes the financial risk of a new business enterprise.
c.) a person who knows how to evaluate which stocks to purchase.
d.) a person who can grow a business quickly.

Answer 1

The correct answer is b.) someone who initiates and assumes the financial risk of a new business enterprise.

Step-by-step explanation:

Financial risk is the probability that an adverse event or some financial fluctuation will report negative consequences in a company. This financial risk refers to the uncertainty produced in the return on an investment, for example.

Financial risks, also known as credit or insolvency risks, ultimately make reference to uncertainties in financial operations arising from the volatility of financial and credit markets, markets that are constantly changing.

Financial risk is closely related to economic risk, since the assets that a company owns and the products or services it offers play a large role in determining its level of indebtedness, as is logical. The more a company enters through the sale of its products, the more likely it is to meet its debts and, therefore, decrease that level.